value at the end of year 4 = 0.20/(0.16 - 0.04) = 1.6667
value of the share today = 1.6667/1.16^4 = 0.920
se sales and profits ofoly Enterprises are growing at a rate of 30% per year. At...
Laurel Enterprises expects earnings next year of $3.94 per share and has a 30% retention rate, which it plans to keep constant. Its equity cost of capital is 9%, which is also its expected return on new investment. Its earnings are expected to grow forever at a rate of 2.7 % per year. If its next dividend is due in one year, what do you estimate the firm's current stock price to be?
Laurel Enterprises expects earnings next year of$3.99 per share and has a 30% retention rate, which it plans to keep constant. Its equity cost of capital is 11%, which is also its expected return on new investment. Its earnings are expected to grow forever at a rate of 3.3% per year. If its next dividend is due in one year, what do you estimate the firm's current stock price to be?
Laurel Enterprises expects eamings next year of $3.73 per share and has a 30% retention rate, which it plans to keep constant. Its equity cost of capital is 11%, which is also its expected return on new investment. If ts earnings are expected to grow forever at a rate of 3% per year, what do you estimate the firm's current stock price to be? (Hint its next dividend is due in one year.) The current stock price will be$. (Round...
Tattletale News Corp. has been growing at a rate of 10% per year, and you expect this growth rate in earnings and dividends to continue for another 3 years. a. If the last dividend paid was $5, what will the next dividend be? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If the discount rate is 23% and the steady growth rate after 3 years is 2%, what should the stock price be today? (Do...
Tattletale News Corp. has been growing at a rate of 20% per year, and you expect this growth rate in earnings and dividends to continue for another 3 years. a. If the last dividend paid was $9, what will the next dividend be? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If the discount rate is 19% and the steady growth rate after 3 years is 3%, what should the stock price be today? (Do...
CH7 1. Laurel Enterprises expects earnings next year of $3.84 per share and has a 50% retention rate, which it plans to keep constant. Its equity cost of capital is 1 1%, which is also its expected return on new investment. Its earnings are expected to grow forever at a rate of 5.5% per year If its next dividend is due in one year, what do you estimate the firm's current stock price to be? 2, Laurel Enterprises expects earnings...
Laurel Enterprises expects earnings next year of $4.12 per share and has a 30 % retention rate, which it plans to keep constant. Its equity cost of capital is 11 %, which is also its expected return on new investment. Its earnings are expected to grow forever at a rate of 3.3 % per year. If its next dividend is due in one year, what do you estimate the firm's current stock price to be?
ABC Inc. has earnings that have been growing at 30% per year. Next year’s earnings are projected to be $0.35 per share. The managers at ABC are aware that this growth will slow soon. In part, this awareness comes from the fact that investment opportunities are thinner than they once were. Managers anticipate that after next year’s earnings, earnings growth will slow to 20% per year for two years. A dividend payment will be initiated at this point (paid in...
General Cereal common stock dividends have been growing at an annual rate of 7% per year over the past 10 years. The last dividend was $1.70 per share. What is the intrinsic value of a share of this stock to an investor who requires a 12% rate of return, under the following conditions: a) Dividends are expected to continue growing at the current rate indefinitely. b) The dividends are expected to decline at a constant rate of 6% per year...
Laurel Enterprises expects earnings next year of $4.29 per share and has a 50 % retention rate, which it plans to keep constant. Its equity cost of capital is 9 %, which is also its expected return on new investment. Its earnings are expected to grow forever at a rate of 4.5 % per year. If its next dividend is due in one year, what do you estimate the firm's current stock price to be? The current stock price will be...